Citation NR: 9718349
Decision Date: 05/27/97 Archive Date: 06/03/97
DOCKET NO. 97-09 280 ) DATE
)
THE ISSUE
Eligibility to payment of legal fees from past-due benefits.
ATTORNEY FOR THE BOARD
R. L. Shaw, Counsel
INTRODUCTION
The veteran had active military service from March 1967 to
March 1970.
This matter involving attorney fees arises from various
proceedings following an October 11, 1990, decision by the
Board of Veterans' Appeals (Board) that denied service
connection for post-traumatic stress disorder (PTSD). The
appeal to the Board was from a September 7, 1989, rating
decision by the Winston-Salem, North Carolina, Regional
Office (RO) of the Department of Veterans Affairs (VA).
The October 11, 1990, Board decision was later remanded by
the United States Court of Veterans Appeals (Court) on March
24, 1992, for additional evidentiary development and
adjudication. After various efforts by the Board and the RO
to comply with the Court’s order, the RO, in an October 1992
rating decision, granted service connection for PTSD and
assigned a 30 percent schedular rating from August 17, 1989.
The veteran appealed the 30 percent rating and a RO hearing
was held in connection with that appeal on August 27, 1996.
By a decision of February 10, 1997, the hearing officer
raised the schedular rating for PTSD to 50 percent from
August 3, 1994, and to 70 percent from March 24, 1996, and
assigned a total rating based on individual unemployability
from March 24, 1996.
The claimant in the present case is an attorney who was
retained by the veteran after the October 11, 1990, Board
decision. A fee agreement executed between them on December
31, 1990, provided for VA withholding of 20 percent of past-
due benefits for payment of attorney fees in the event of an
award of compensation. Direct VA payment of attorney fees
from past-due benefits created following the original grant
of service connection for PTSD, the assignment of a 30
percent rating and an award of additional benefits for
dependents was authorized by the Board on April 28, 1994.
(The RO inadvertently failed to withhold 20 percent of past-
due benefits following the grant of service connection and
the initial assignment of a 30 percent rating. Twenty
percent of past-due benefits was withheld based upon past-due
benefits created by the award of additional benefits for
dependents.) Presently at issue is entitlement to payment of
additional attorney fees from past-due benefits created by
the decision of the hearing officer in February 1997.
The RO notified both parties by letter on March 13, 1997,
that the case was being transferred to the Board for a
determination concerning the attorney's eligibility for
payment of attorney fees from past-due benefits. They were
advised that any additional evidence or argument should be
submitted to the Board within 30 days. No response was
received from either party.
CONTENTIONS
No specific contentions regarding the attorney’s eligibility
to receive attorney fees from past-due benefits have been
received from either the attorney or the veteran.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991 & Supp. 1996), has reviewed and considered
all of the evidence and material of record in the veteran's
claims file. Based on its review of the relevant evidence in
this matter, and for the following reasons and bases, it is
the decision of the Board that the attorney is not entitled
to charge or receive a fee for legal services provided to the
veteran in connection with an award of an increased rating
for PTSD.
FINDINGS OF FACT
1. A Board decision allowing an appeal for service
connection for PTSD was entered on October 11, 1990.
2. The original notice of disagreement in that claim was
received and filed on or after November 18, 1988.
3. The claimant was retained within one year after the
October 11, 1990, Board decision; the fee agreement signed by
the parties provides for VA withholding of 20 percent of
past-due benefits for payment to the attorney.
4. Legal services involving the veteran's VA claim were
rendered by the claimant.
5. Payment of attorney fees from past-due benefits created
following the original grant of service connection for PTSD,
the initial assignment of a 30 percent rating and the award
of additional benefits for dependents were authorized by the
Board on April 28, 1994.
6. Additional past-due benefits were created by a February
10, 1997, decision by a hearing officer at the RO which
awarded increased schedular ratings for PTSD and a TRIU as a
result of an appeal of the original 30 percent rating.
6. The Board has never issued a final decision concerning the
veteran's entitlement to an increased rating for PTSD or to a
TRIU.
CONCLUSION OF LAW
The attorney is not eligible to charge a fee for services
before VA in connection with the veteran’s appeal for an
increased rating for PTSD or a TRIU. 38 U.S.C.A.
§ 5904(c)(1) (West 1991 & Supp. 1996); 38 C.F.R.
§§ 20.609(c),(h)(3)(i) (1996).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The law permits VA claimants to enter into agreements with
attorneys and agents for payment of fees for services
rendered in representing them in VA proceedings, provided the
fees are neither "excessive" nor "unreasonable." 38 U.S.C.A.
§§ 5904(c) and (d) (West 1991 & Supp. 1996). Section
20.609(c) of 38 C.F.R. (1993), implementing 38 U.S.C.A.
5904(c)(1) (West 1991), provides that a fee may be charged of
the claimant or appellant if the following conditions are
met:
(1) A final decision has been promulgated
by the Board of Veterans' Appeals with
respect to the issue, or issues, involved;
(2) The Notice of Disagreement which
preceded the Board of Veterans' Appeals
decision with respect to the issue, or
issues, involved was received by the agency
of original jurisdiction on or after
November 18, 1988; and
(3) The attorney-at-law or agent was
retained not later than one year following
the date that the decision by the Board of
Veterans' Appeals with respect to the
issue, or issues, involved was
promulgated....
On October 11, 1990, the Board issued an unfavorable decision
in an appeal of the veteran's claim for service connection
for PTSD. Shortly thereafter, on December 31, 1990, the
veteran and the attorney executed a contract by which the
attorney was retained to provide legal services in connection
with the veteran's VA claim, as a result of which legal
services were rendered on the veteran's behalf. The
statutory requirements for recognition of the fee agreement
for VA purposes were therefore met with respect to the
original service connection grant and the assignment of the
initial disability rating. 38 U.S.C.A. § 5904(c)(1) (West
1991 & Supp. 1996); 38 C.F.R. § 20.609(c) (1996). Payment of
attorney fees from withheld past-due benefits on account of
additional benefits for dependents was previously authorized
by the Board.
With respect to the additional past-due compensation paid as
the result of the assignment of increased ratings for PTSD
and the granting of a TRIU, the first of the three
prerequisites for charging a fee has not been satisfied. The
October 11, 1990, Board decision was limited to the issue of
entitlement to service connection; the issues of entitlement
to an increased rating for PTSD or to a TRIU have never been
addressed by a final decision of the Board. The adjudication
which raised the rating for PTSD and granted a TRIU did not
take place until after a separate NOD on the increased rating
question had been received. The favorable hearing officer
decision was based on an entirely separate legal analysis
from that undertaken in the service connection award and
involved application of different law and regulations.
There is no provision in the law for waiver of the
requirement that the matter have first been the subject of a
final decision by the Board. This requirement has been
discussed by the VA Office of General Counsel in a precedent
opinion which cited an analysis of the legislative history of
the VJRA contained in a decision of the Court in In the
Matter of Smith, 1 Vet.App. 492, 508-09 (1991) (Steinberg,
J., concurring), which emphasized that Congress envisioned
that there would be paid attorney representation only after
the Board first enters a final decision on the claim. The
General Counsel concluded that an attorney may not receive or
solicit a fee in connection with representation of a claimant
before the Department of Veterans Affairs on a benefits issue
until after the Board first issues a final decision on that
claim. VA O.G.C. Prec. No. 18-92, 57 Fed. Reg. 49747 (1992).
The VA regulation which implements the statutory language
regarding the circumstances under which a fee may be charged
is also explicit on this point. See 38 C.F.R. § 20.609 (c)
(1996) (“[A]ttorneys-at-law and agents may charge claimants
or appellants for their services only if all of the following
conditions have been met:...(1) A final decision has been
promulgated by the Board of Veterans' Appeals with respect to
the issue, or issues, involved....”(Emphasis added).)
If an attorney is retained before the issuance of a final
Board decision, his services are pro bono until the date of a
final Board decision. A fee may be charged for all services
subsequently rendered on the same issue. See In re Fee
Agreement of Stanley, No. 96-17 (U.S. Vet.App. Feb. 25, 1997)
regarding the “same issue” requirement. If benefits are
later awarded, through adjudication at any level, reasonable
attorney fees may be charged.
The appeal for a rating higher than 30 percent did not
constitute a continuation of the service connection issue for
attorney fees purposes. A VA regulation permits the payment
of attorney fees in certain circumstances if an increased
rating is assigned as the result of an appeal of the initial
rating. See 38 C.F.R. § 20.609(h)(3)(i), which provides as
follows:
If an increased evaluation is
subsequently granted as the result of an
appeal of the disability evaluation
initially assigned by the agency of
original jurisdiction, and if the
attorney-at-law represents the claimant
or appellant in that phase of the claim,
the attorney-at-law will be paid a
supplemental payment based upon the
increase granted on appeal, to the extent
that the increased amount of disability
is found to have existed between the
initial effective date of the award
following the grant of service connection
and the date of the rating action
implementing the appellate decision
granting the increase.
However, since this language authorizes a supplemental
payment only when an increased rating has been “granted on
appeal,” clearly it is not applicable until after there has
been a final Board decision on the increased rating issue.
The regulation cannot be read in such a way as to permit
additional entitlement to charge attorney fees for services
provided in connection with an appeal for an increased rating
or a TRIU when neither matter has previously been considered
by the Board.
The Board must therefore find that the attorney is precluded
by law from charging a fee for legal services provided to the
veteran after the assignment of the initial 30 percent rating
for PTSD with additional benefits for dependents. He is,
thus, ineligible to receive any portion of the past-due
benefits created by the adjudication of February 1997. Since
the requirements of 38 U.S.C.A. § 5904(c)(1) are not
satisfied, the Board may not consider whether the fees
chargeable under his agreement would be, in fact, reasonable.
ORDER
Eligibility to charge or receive a fee for legal services
provided to the veteran in connection with an award of an
increased rating for PTSD and a TRIU is denied.
BARBARA B. COPELAND
Member, Board of Veterans’ Appeals
The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, 741
(1994), permits a proceeding instituted before the Board to
be assigned to an individual member of the Board for a
determination. This proceeding has been assigned to an
individual member of the Board.
NOTICE OF APPELLATE RIGHTS. Under 38 U.S.C.A. § 5904(c)(2)
(West 1991), a finding or order of the Board of Veterans'
Appeals upon review of an agent's or attorney's fee agreement
may be reviewed by the United States Court of Veterans
Appeals under 38 U.S.C.A. § 7263(d) (West 1991). Under
38 U.S.C.A. § 7266 (West 1991 & Supp. 1995), a final decision
of the Board of Veterans' Appeals may be appealed to the
United States Court of Veterans Appeals by a person adversely
affected by the decision within 120 days from the date of
mailing of notice of the decision. The date which appears on
the face of this decision constitutes the date of mailing and
the copy of this decision which you have received is your
notice of the action taken by the Board of Veterans' Appeals.
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